Market Focus

Despite board members from Bank of Japan see continued high uncertainty surrounding the economy, no major change to the current monetary tools is considered. BOJ officials want to continue to closely monitor effects of previously implemented policy as the financial markets remain relatively stable and companies are not facing significant funding problems. Quarterly projections for prices and growth will be published on July 15.

The White House wants Congress to pass another $1 trillion stimulus package by the first week in August before summer recess, which is scheduled to be August 3^rd. They are set to intensify talks regarding the new package as they return to Washington after the Independence Day holiday.

RBA kept interest rate unchanged as widely expected. Key takeaways from RBA monetary policy statement:

• Will not raise rate until progress made to full employment
• Prepared to scale up bond purchases if needed
• 3-year yield target unchanged at 0.25%
• Australian economy is going through a very difficult period and is experiencing the biggest contraction since the 1930s

Market Wrap

Main Pairs Movement

GBPUSD was up in three-consecutive days, the strong intraday bounced seemed unaffected by resurgent of US dollar demand. The uptick in cable lacks significant fundamental catalyst and could be solely associated with intraday short-covering move. Negotiation between UK and EU will carry on, despite not much progress being made, speculators seem to lighten their bearish bet on Brexit compared to 2019.

Gold has reached new highs, hitting a peak of 1797 during US trading session, a price not seen since late 2012. The precious metal is benefiting from central bank’s expansion of their balance sheets, and constantly injecting liquidity into financial market. US 10-year bond yield also dropped 5.8%, indicating some risk aversion mood.

COVID-19 Data (EOD):

Technical Analysis:

GBPUSD (H4)

Cable continued to climb upward without looking back, currently trading at 1.2548. Bull takes the pound to a four-week high, and yet failed to surpass 61.8% Fibonacci at 1.26 handle.   MACD on the four-hour chart is showing a bullish signal, if bullish histogram continues to build up, then it could look pass 1.26 and move to challenge 71.4% Fibonacci, which meets perfectly with key resistance level at 1.267.

Resistance: 1.26, 1.267,1.275

Support: 1.247, 1.2395, 1.2268

USDCHF (H4)

USDCHF was kept below SMA50, price rose and fell, and stayed unchanged on Tuesday. The precious correction has been interrupted and it is now back to big down trend built from early June. Resistance of SMA50 needs to be overcome for the current downside pressure to be alleviated, otherwise the pair looks pass 0.9391 and potentially reach 0.9325 in the medium term.

Resistance: 0.946, 0.9535, 0.9603

Support: 0.9391, 0.9325, 9252

XAUUSD (H4)

Gold conquered $1786 resistance, closed the day up 0.61%. The yellow metal touched the uptrend bottom line, then bounced furiously. There is not much horizontal resistance level above the current price, which makes $1800 handle a good pivot point. RSI was right beneath 70 overbought line, thus price could possibly continue to move upward until hitting $1800 and RSI breaching 70 before retreating to $1786.

Resistance: 1800, 1819, 1836,

Support: 1786, 1761, 1742

Economic Data

Risk Warning:

Trading Forex and CFDs involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose and should ensure that you fully understand the risks involved. Trading leveraged products may not be suitable for all investors. Before trading, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary. Please read our legal documents and ensure that you fully understand the risks before you make any trading decisions.

The information provided is of a general nature only and the advice has been prepared without taking account of your objectives, financial situation or needs.

Daily Market Analysis

Market Focus

US stocks surged, with tech shares pushing Nasdaq Composite to a record high. The DXY continued to fall for a fifth day while US Treasuries dipped. On the same note, the S&P 500 index headed towards its fifth increase as Amazon shares achieved the $3,000 threshold for the first time and Tesla extended its 5-day rally to about 40%. Overall, the dollar’s weakness has been the story of the day as it has officially slid to its weakest level since June 10 with risk-on sentiment diminished the demand for havens and drove equities higher.

Global stock markets started the week quite strong with Stoxx Europe 600 Index climbed 1.6% and developing countries’ stocks added 2.5% as a result of the Chinese markets pushing a global equity benchmark toward a one-month high.

Market Wrap

Main Pairs Movement

GBPUSD is trading higher, reaching 1.25. The overall risk-on market sentiment is boosting Sterling. Even though BOE Gov Bailey reportedly raised the potential option in negative interest rates, the market seems unaffected. The USDCAD, on the other hand, dropped to 1.3518 on Monday, finding support at the lowest level in two weeks, and rebounded back up to 1.3560 to close the day.

Gold rose slightly by about 0.50% on the day, extending its well-performance despite a risk-on market while the demands for the greenback fades away. In terms of black gold, like most commodities, WTI is still struggling to find sustainable demands with the ongoing COVID-19 crisis.

COVID-19 Data (EOD):

Technical Analysis:

 EURUSD (H4)

EURUSD has surged above 1.13 price level, hitting the highest level in nearly two weeks. The sudden surge in the pair is mainly driven by the unexpectedly better ISM Non-Manufacturing PMI number of 57.1 and China’s bullish equity market. Both statistics weighed down on the safe haven dollar as investors regain confidence amid the intensifying coronavirus situation in the US. According to EURUSD’s 4-hour chart, the pair appears to be sitting well above its moving average, which in turn, suggests the pair would retain its bullish momentum in the short term.

Resistance: 1.1350, 1.1388, 1.1420

Support: 1.120, 1.1230, 1.1265

USDJPY (H4)

Following the weakened DXY, the USDJPY pair has made a slight dip in its price for the day. However, this is an uncommon scenario as USDJPY usually moves higher with the US stock markets. One plausible explanation is that despite the market’s risk-on sentiment, concerns over potential risk of the coronavirus’ outbreak still preserves the upbeat momentum of yen. Under this mixed situation, with yen’s strength, USD’s weakness, and growing equity markets, USDJPY is likely to stay choppy between 107.40 and 107.70 range in the upcoming trading days.

Resistance: 107.45, 107.67, 108.18

Support: 106.00, 106.63, 107.05

AUDUSD (H4)

AUDUSD is approaching a one-month high at 0.7000 as the global appetite for equities improved. Additionally, the commitment from the Chinese government to uphold the economy has also helped the AUD to gain some traction as well. Looking at the chart, AUDUSD appears to struggle a bit at the resistance around 0.6980. At the same time, the RSI has just pulled away from the overbought zone, which in turn, implies the AUDUSD price is overstretched and a pullback is expected to take place before the pair rise again.

Resistance: 0.6985, 0.7015, 0.7060

Support: 0.6800, 0.6855, 0.6900

Economic Data

Risk Warning:

Trading Forex and CFDs involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose and should ensure that you fully understand the risks involved. Trading leveraged products may not be suitable for all investors. Before trading, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary. Please read our legal documents and ensure that you fully understand the risks before you make any trading decisions.

The information provided is of a general nature only and the advice has been prepared without taking account of your objectives, financial situation or needs.

Market Focus

Investors continue to weigh signs that global economies are on the mend against relentless new outbreaks of the virus. US payrolls data Thursday fueled optimism of a V-shaped recovery in the world’s biggest economy.

Australia’s Retail Sales for May printed 16.9%, slightly above estimate of 16.3%, a big leap from previous -17.7%.  While China’s June month Caixin Services PMI grew past-49.9 expected and 55 prior to 58.4.

Market Wrap

Main Pairs Movement

Due to US Independence Day, liquidity was drained out in forex market, all major pairs were traded in tight range.

COVID-19 Data (EOD):

Technical Analysis:

 GBPUSD (H4)

Cable has broken its downward trend line from mid-June and bounced to challenge 38.2% Fibonacci at 1.253, but failed to advance beyond this level.  The bullish reversal may move ahead of itself, if price can retrace towards1.24 without breaching lower, then the current bullish run could be sustainable.

Resistance: 1.253, 1.267, 1.2788

Support: 1.24, 1.2268, 1.218

AUDUSD (H4)

Aussie is kept within a tight range, depressed liquidity from US Independence Day has added noise to price momentum. The near-term trend favors the bull as price sits comfortably in Bollinger’s upper region, but whether it could overcome resistance band of 0.6967 – 0.702 within the next few trading days remains questionable.

Resistance: 0.6967, 0.702, 0.712

Support: 0.6897, 0.6803, 0.6669

XAUUSD (H4)

Gold’s bullish bias is still intact and RSI shows price is far from overbought, which provides plenty space for the precious metal to climb. Bulls are looking over $1786 hurdle, and $1800 target remains a distinct possibility. On the flip side, failure to defend $1760 could result in a bearish reversal, which would possibly prompt some aggressive selling.

Resistance: 1786, 1819, 1836

Support: 1761, 1742, 1722

Economic Data

Risk Warning:

Trading Forex and CFDs involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose and should ensure that you fully understand the risks involved. Trading leveraged products may not be suitable for all investors. Before trading, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary. Please read our legal documents and ensure that you fully understand the risks before you make any trading decisions.

The information provided is of a general nature only and the advice has been prepared without taking account of your objectives, financial situation or needs.

VT Markets, a leading technology-oriented CFD broker, today announced another major steps of expanding their business globally – their official website is now ready to support 7 languages: English, French, Spanish, Portuguese, Arabic, Vietnamese and Chinese. The pages will be deployed within the next 2 weeks.

Mark X., the Chief Branding Offers of VT Markets, said, “This is another step we take in Project ‘VT Markets 2.0’ to expand our business from APAC region to world-wide, and it is also a strong signal to show that VT Markets is capable of servicing clients all over the world and provide the exceptional trading environment that they’ve ever experienced.”

VT Markets has always been built on transparency, trust, credibility and a well-satisfied service offering as a CFD broker – after upgrading its Client Portal & IB Portal, and optimising its tradeable instruments earlier this year, VT Markets is now one step closer to give a huge shout out to CFD traders around the world.

“Innovation makes the difference”, our elite teams are still working to provide even more features to our clients – more funding channels, faster account openings, in-depth reporting, a much better user-computer interaction interface; for our affiliates, the latest partnership with Cellxpert will make a more effective affiliate management system implemented & ready to go in the next few weeks. We’ve put a great deal of effort and expertise into developing a process that makes everything easier for our clients.

VT Markets will not be stopped moving forward with the pandemic. In the second half of 2020, VT Markets’ existing clients and new-comers will see more changes done here, stay tuned and take a look at the new and improved VT Markets website https://www.vtmarkets.com/ and its Next-gen client portal https://myaccount.vtmarkets.com/

Optimised by Marketix.

Daily Market Analysis

Market Focus

The US Nonfarm Payroll report showed that the country has added 4.8 million new jobs in June while the unemployment rate dropped to 11.1%, both much better than anticipated. However, other employment related data such as the Average Hourly Earnings missed market’s expectations. Ahead of the release, equities were up, and data further boosted the market’s optimism.

The good news and the upward momentum were short lived as new COVID-19 cases continue to increase in the US with over 51,000 new cases reported. As a result, major cities in New York and California have declared the postponing re-opening of indoor activity.

Market Wrap

Main Pairs Movement

Wall Street trimmed early gains, with the three major indexes closing the day with only modest gains. US bond yields were marginally higher. Gold bounced back from 1757 and closed the day around 1776. Crude Oils remained within similar levels, with WTI stuck around 40.00 a barrel. Additionally, concerns over COVID-19 and the global economic recovery are weighing down on the USDJPY as the investors began to question the safe haven qualities of the greenback. On the other hand, amid a mixed market sentiment throughout the day, AUDUSD pair experienced a seesawed day with minor gains and losses for a second consecutive day.

COVID-19 Data (EOD):

Technical Analysis:

 XAUUSD (H4)

US Unemployment rate turned out to be much better than market’s expectation (Actual: 11.1%; Forecast: 12.3%), which in turn, initiated a rally across major Wall Street’s indexes. As a result, the safe-haven metal dropped down to 1757. Nevertheless, the gold has surged back from the lows and is currently trading at daily highs, nearing the 1780 range. The bullish momentum remains intact in XAUUSD but is facing strong resistance approaching the 1800 region. A consolidation between 1765 and 1775 seems more likely as the market waits for further data and market sentiment amid the second wave of coronavirus.

Resistance: 1800, 1789, 1780

Support: 1760, 1753, 1748

EURUSD (H4)

The EURUSD was rejected at the 1.1300 area earlier today and has retreated towards 1.12300 during the US afternoon trading session. The better than expected US Non-Farm Payrolls have elevated market sentiment on Thursday, weighing down on the demand for the greenback. However, the euro still fails to take advantage of the dollar’s weakness as the unemployment rate across the Euro area continues to tick up. We expect the pair to first find a support around 1.1240 area before rebounding back to the 1.1300 levels.

Resistance: 1.13000, 1.13300, 1.13626,

Support: 1.11760, 1.12080, 1.12240

USDCAD (H4)

After hitting above 1.3600 in the early trading hours, the Loonie is unable to gain traction and dropped below 1.35670. The strong US data pushed the greenback higher today, but the pair remains quite flat as oil price has supported CAD to offset the USD strength. Overall, as various US cities are going back under lockdown, the likelihood of the greenback to sustain its strength becomes slim. With that being said, we believe there is still space for the pair to move lower if a new round of selling momentum takes place.

Resistance: 1.3623, 1.3673, 1.3720

Support: 1.3560, 1.3524, 1.3485

Economic Data

Risk Warning:

Trading Forex and CFDs involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose and should ensure that you fully understand the risks involved. Trading leveraged products may not be suitable for all investors. Before trading, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary. Please read our legal documents and ensure that you fully understand the risks before you make any trading decisions.

The information provided is of a general nature only and the advice has been prepared without taking account of your objectives, financial situation or needs.

 Market Focus

ISM Manufacturing PMI rose to 52.6 from previous 43.1, beating estimate of 49.5. The printed figure was the highest number recorded in a year. ADP’ private-sector jobs rose by 2.369 million in June, ADP Research Institute vice president said “as the economy slowly continues to recover, we are seeing a significant rebound in industries that once experienced the greatest job losses.”

China decided to impose new security laws in Hong Kong after a year of pro-democracy protests. The national security law is aimed at punishing acts of secession, subversion of state power, terrorism and “collusion with foreign and external forces to endanger national security. According to the draft bill, China will establish a new bureau in Hong Kong to analyze the security situation and collect intelligence. US Secretary of State Michael Pompeo said Hong Kong could no longer be considered sufficiently autonomous, and Donald Trump is considering revoking some or all of its special trade privileges.

Key highlights of FOMC minutes:

• Fed officials agreed on need for more analysis for Yield-Curve-Control.
• Planning on beefing up its forward guidance for interest rates in the coming months.
• Fiscal policy could potentially represent a big downside risk.
• Negative interest rates did not appear to be an attractive policy tool.

Market Wrap

Main Pairs Movement

Dollar weakened across the board, the dollar index dropped 0.23% to 97.15. Most majors were climbing against the greenback prior to US market open. Possible mover could be Biopharmaceutical New Technologies’ announcement on Wednesday that the COVID-19 vaccine that they co-developed with Pfizer triggered a strong immune response in the early stage of human trials, thus triggering risk-on mood.

COVID-19 Data (EOD):

Technical Analysis:

 USDJPY (H4)

USDJPY is hovering above the edge of the upward trending support line, currently trading at 107.46. A clear downward breakout might push price toward 100 SMA and 50 SMA cross. Otherwise, any moves beyond 200 SMA should strengthens the current upward trend. RSI retraces back to 50 midline after briefly touched 70 overbought yesterday.

Resistance: 107.93, 108.55, 109

Support: 107.09, 106.53, 106

GBPUSD (H4)

Cable was trapped in the Bollinger’s lower region since last Wednesday, and finally made a bullish reversal during yesterday’s US session. The pair continued to stay within the upper region throughout Wednesday and broke the downward trendline since mid-June. RSI is approaching 70, and price sitting outside of Bollinger upper bound, these combined to favor bear in the near term.

Resistance: 1.2536, 1.2627, 1.2753

Support: 1.2427, 1.2363, 1.2268

USDCHF (H4)

USDCHF is capped below SMA100 and SMA50. Price tested 0.9443 three times in the last five trading days, it has yet to make a lower-low on the four-hour chart, if it does then bear will take the driver seat. Looking downward, 0.9391 will be the first resistance line followed by 0.9325.

Resistance: 0.9533, 0.9603, 0.9647

Support: 0.9443, 0.9391, 0.9325

Economic Data

Risk Warning:

Trading Forex and CFDs involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose and should ensure that you fully understand the risks involved. Trading leveraged products may not be suitable for all investors. Before trading, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary. Please read our legal documents and ensure that you fully understand the risks before you make any trading decisions.

The information provided is of a general nature only and the advice has been prepared without taking account of your objectives, financial situation or needs.

Daily Market Analysis

Market Focus

US benchmarks ended higher on Tuesday, seeing off the best quarter for Wall Street since 1998. The S&P 500 gained 1.5% to 3,100 while the Dow Jones Industrial Average added 0.9%, which is equivalent to 217 points, and hit 25,812. Lastly, the Nasdaq Composite rallied 1.9% to finish the day at 10,059. The overall performance of the Wall Street indexes in the second quarter are the followings: S&P 500 surged 18%, the Nasdaq soared 29.4%, and the Dow up 15.6%.

However, as stated by the Fed chairman, Jerome Powell, the second outbreak of the coronavirus could force governments and people to withdraw from the economic activity, suggesting that the economy outlook is highly uncertain. Therefore, without knowing if a second round of lockdowns is going to take place or not, the US equity markets’ upcoming outlook remains unpredictable.

Market Wrap

Main Pairs Movement

. EURUSD pair is finishing a dull June with little change. Speculative interest to get rid off the greenback at the end of the quarter amid accumulating concerns over US economic outlook has weighed down on USD. USDJPY is at a critical juncture while second wave noise pipes up and questions the USD dominance. Nevertheless, USDJPY appears to be ripe enough for a sell-off if 108 level continues to guard. USDCAD, on the other hand, has failed to sustain its gains from its 1.3700 range during the North America trading session and finished the day at the lows of 1.3570.

COVID-19 Data (EOD):

Technical Analysis:

XAUUSD (H4)

The precious metal has achieved a new multi-year high above 1780 level today as money managers rush to adjust their portfolios ahead of the end of the month and quarter. XAUUSD has strong support in 1765, a convergence of the previous 4 hour low and the previous monthly highs. In the uptrend, 1791 and 1803 guard the bullish rally, an area that was last seen in Feb/Oct 2012 and Nov 2011. Additionally, this price range is also considered as the last defense for the 1921.50 Sep 2011 high. We expect an immediate upside pressure should take place and keep the precious metal price around the 1800 zone.

Resistance: 1782, 1791.15, 1803.30

Support: 1704.89, 1746.40, 1766.15

GBPUSD (H4)

GBPUSD shows a strong bullish momentum today, bouncing back from the lows of 1.22600 range to 1.23960 as the Wall Street closes today. Knowing the ramifications of a second wave of COVID-19 in the UK and fresh rounds of Brexit talks, bears are expected to target the downside at this juncture. If the pair can penetrate the 1.2417 resistance, we expect the Cable to rally towards the 1.2440s level.

Resistance: 1.2401, 1.2441, 1.2473

Support: 1.2250, 1.2208, 1.2159

AUDUSD (H4)

AUDUSD surpasses 0.6900 in the early Asia session as the greenback enters a new round of selling pressure. AUD has been performing well on the session as investors have turned their attention back to the US equity markets. While there is still room to the upside, minor pullbacks are expected as the MACD for AUDUSD appears to be quite flat, a sign that suggests upcoming consolidations.

Resistance: 0.6887, 0.6962, 0.7060

Support: 0.6853, 0.6799, 0.6715

Economic Data

Risk Warning:

Trading Forex and CFDs involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose and should ensure that you fully understand the risks involved. Trading leveraged products may not be suitable for all investors. Before trading, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary. Please read our legal documents and ensure that you fully understand the risks before you make any trading decisions.

The information provided is of a general nature only and the advice has been prepared without taking account of your objectives, financial situation or needs.

Market Focus

Total death toll worldwide has surpassed 500,000 and confirmed cases exceeded 10 million. WHO warned that the worst scenario has yet to come. European Union governments is considering extending a travel ban for US residents for at least two weeks. On the other hand, several US states decided to halt plans to reopen restaurants and bars.

US Pending Home Sales for May rose to 44.3% from April -21.8%, far outpaced estimated 18.9%. The figure refreshed the highest record in history as mortgage rates fell. Mortgage rates have dropped to the lowest level, helping to stabilize demand in housing industry, which was severely dampened by COVID-19.

Key takeaways from BoE Bailey speech:

• Current scale of central bank reserves mustn’t become a permanent feature
• As economies recover, it’s likely that some of the exceptional monetary stimulus will need to be withdrawn, including by reducing reserves.
• Now expecting 20% fall in GDP in Q1 and Q2 combined vs 27% fall in May scenario.
• BoE does not have specific triggers for further increases in QE.
• Slowing of the pace of QE reflects recent signs from the economy and calming of markets since March.

Market Wrap

Main Pairs Movement

Cable initially rose 50 pips as Boris Johnson promised to double down on investment on infrastructure, education, and technology. Then, price took a U-turn since Euro session, the pair ended up losing 32 pips. Brexit negotiation is still full of uncertainties, but both sides seem to agree that the deadline to get a deal will not be extended. One official said Monday’s face-to-face meeting have accomplished nothing except negotiate an agenda.

Safe-haven Yen and Franc suffered the most against US dollar on Monday, both dropped 0.33%. USDJPY and USDCHF surged during US session where US indices rose simultaneously, suggesting an investing sentiment favored risky assets.

COVID-19 Data (EOD):

Technical Analysis:

EURUSD (H4)

Euro-dollar failed to capitalize on its early gain and is kept beneath 1.1287. Price touched Bollinger’s upper band for the first time in a week, and was lingering above the mid-line. The band on the four-hour chart is narrowing, which could be a set-up for upcoming surge or plummet. If it manages to stay above Bollinger mid-line within the white box highlighted above, it could move to take out 1.1287 resistance. Otherwise, bear will regain control.

Resistance: 1.1287, 1.1348, 1.1394

Support: 1.1177, 1.1096, 1.1023

USDJPY (H4)

USDJPY successfully conquered SMA100, and it aims to regain 108 handle. It once reached 107.9, the highest price in two weeks. The pair is currently hovering above SMA200, turning the resistance into a support. The bullish breakout was freshly completed on Monday, and there is plenty on the upside. Thus, bull looks to have upper hand over bear.

Resistance: 108, 108.55, 109.2

Support: 107.1, 106.5, 106

USDCAD (H4)

USDCAD has been sitting comfortably within Bollinger Band’s upper region, and frequently touch the upper line since last Thursday. The upward channel remains intact with 1.3739 acting as a near resistance, which should be challenged in the near term. If price reversed and touch Bollinger’s lower line, then the pair could trade sideways, but a bearish reversal looks unpromising.

Resistance: 1.3739, 1.3865, 1.4033

Support: 1.352, 1.3377

Economic Data

Risk Warning:

Trading Forex and CFDs involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose and should ensure that you fully understand the risks involved. Trading leveraged products may not be suitable for all investors. Before trading, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary. Please read our legal documents and ensure that you fully understand the risks before you make any trading decisions.

The information provided is of a general nature only and the advice has been prepared without taking account of your objectives, financial situation or needs.

Daily Market Analysis

Market Focus

Toward the end of trading Friday, the Dow traded down 2.72% to 25,044.16 while NASDAQ dropped 2.18% to 9798. Additionally, the S&P 500 also fell 2.19%, hitting 3016.20. The main driving force for the poor Wall Street indexes performance is still the accumulating new COVID-19 cases; currently, the US still holds the highest number of coronavirus cases and deaths in the world, reporting a total of 2,422,310 with around 124,410 deaths. Brazil confirmed a total of 1,228,110 cases as Russia reported a total of 619,930 cases.

Additionally, the followings are important economic data released today:

• US personal spending rose 8.2% in May while personal income fell 4.2% in May.
• The University of Michigan’s consumer sentiment index declined to 78.1 in June, versus a preliminary reading of 78.9.
• The total number of active US oil rigs slipped by 1 to 188 rigs this week, Baker Hughes Inc reported.

Market Wrap

Main Pairs Movement

European shares closed mostly lower today. The eurozone’s STOXX 600 fell 0.39, the Spanish Ibex Index fell 1.26% while Italy’s FTSE MIB Index dropped 0.57%. Moreover, the German DAX300 dipped 0.73%, French CAC 40 dropped 0.18%, and UK shares increased by 0.2%.

In terms of major commodity, oil traded down 1.1% to $38.29 while gold hit 1781.00, which is an increase of 0.6%. Silver traded up 0.6% Friday to 17.995 while copper rose 0.1% to 2.666.

Last but not least, in the forex market, USDJPY dropped to a daily low of 106.80 but staged a rebound during the American trading hours. The USD buying picked up pace during the early North American session and pushed the AUDUSD pair to fresh daily lows around 0.6850s.

COVID-19 Data (EOD):

Technical Analysis:

EURUSD (H4)

EURUSD enters a series of consolidations on Friday as the pair first hit 1.1238 on the upside during the European session but then resuming the down sliding. The EURUSD later bottomed at 1.1200 zone in the later risk-off session, which is indicated by the overall negativity among the US indexes. In the earlier trading hours, EUR enjoyed a impulse as the comments of ECB president affirmed that the world may have already passed the worst of the coronavirus crisis and that central banks have responded massively to the challenge. However, the risk appetite is crushed as Texas Governor claimed that he plans to roll back economy reopening plans amid the recent surge in new COVID-19 cases. To sum it up, the EURUSD pair has been closely associated with the rising concerns over the virus pandemic, thus, if the US new cases continue to increase, US dollar will rally on investors’ risk aversion.

Resistance: 1.1245, 1.1275, 1.1330

Support: 1.1147, 1.1180, 1.1205

GBPUSD (H4)

Cable has plummeted intensely as the greenback rallied across the board. GBPUSD tumbled to 1.2314. hitting the lowest price range since May 29. On the downside, if the GBPUSD penetrates 1.2300, the next support is at 1.2292, followed by 1.2250. Considering the increasing risk aversion market sentiment fueled by the second wave of virus pandemic, the extended bearish momentum is likely to pressure the pair down below 1.2300.

Resistance: 1.2441, 1.2537, 1.2648

Support: 1.2250, 1.2292, 1.2335

USDCAD (H4)

USDCAD broke out of its consolidative range and rose to its multi-week tops around 1.37145 mark during the early North American trading session. However, the pair dropped immediately after it hit the 1.37145 region and has been trading between 1.36500 and 1.36690. Overall, the increasing demand for greenback and the stagnated WTI price (which is likely to be the result of the diminishing demand for crude oil amid increasing virus cases) suggest the pair is going to sustain a relatively bullish momentum in the upcoming trading days.

Resistance: 1.3855, 1.3800, 1.3715

Support: 1.3623, 1.3576, 1.3488

Risk Warning:

Trading Forex and CFDs involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose and should ensure that you fully understand the risks involved. Trading leveraged products may not be suitable for all investors. Before trading, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary. Please read our legal documents and ensure that you fully understand the risks before you make any trading decisions.

The information provided is of a general nature only and the advice has been prepared without taking account of your objectives, financial situation or needs.

Market Focus

US Initial Jobless Claims printed 1.48 million in the week ended June 20. This figure came below forecast of 1.3 million, nonetheless recorded a 13^th consecutive weekly declines since April. GDP stayed put at -5% for the first quarter, the lowest reading since June 2009. May’s Core Durable Goods Orders rebounded to 4% from last month’s -8.2%. Market remained quiet on the back of the news, US stocks and bonds barely responded.

International Monetary Fund downgraded its outlook for global economy, the organization expects global GDP to shrink 4.9% this year, previously predicted 3%. Forecast for 2021 also adjusted down to 5.4% compared to 5.8% previously. IMF said its increased pessimism reflected scarring from a larger-than-anticipated supply shock during the earlier lockdown.

Main takeaway from ECB Meeting Minutes:

• Price pressures have weakened, inflation expectations have declined, and growth risks are skewed to the downside.
• Weak demand is likely to be a much larger problem than supply constraints.
• Negative side effects had so far been clearly outweighed by the positive effects of asset purchases

Market Wrap

Main Pairs Movement

Forex trading session on Thursday was relatively mixed. Most majors were trading within a tight range, Aussie and Kiwi were the best performers among G-10, both gained around 20 pips intraday.

 Euro extended its decline from yesterday, lost 33 pips against the greenback. Economic data released on Thursday from the US was mostly ignored by market participants. On the other hand, ECB said some Governing Council members expressed reservations about the size of the PEPP expansion at their meeting this month, reducing funding liquidity prior to a fully recovered economy may impose potential downside risk to Euro Zone.

COVID-19 Data (EOD):

Technical Analysis:

 AUDUSD (H4)

Aussie has been capped by SMA50 in the four-hour chart throughout Thursday. The commodity linked currency is forming a triangle that is gradually pushing price into a narrow range, we should be able to see a breakout in the near term. If it fails to surpass resistance of 0.6897, then a bearish breakout should take place, otherwise it could eye for 0.7 handle once again.

Resistance: 0.6897, 0.6967, 0.7

Support: 0.6803, 0.6669, 0.6591

USDJPY (H4)

USDJPY was extending its recovery from 106 region, and currently sits firmly above 107. It is now entering into a region where it previously struggled to find a direction for a whole week. With the lack of economic impetus on Friday, we could return to a similar undecisive trading session. If it can break SMA100 and SMA200, which should be reachable in the short term, then USDJPY will proceed to test 108.55 resistance; otherwise, it could retrace back to 106.53.

Resistance: 107.93, 108.55, 109.2

Support: 107, 106.53, 106

EURUSD (H4)

Euro-dollar has fully formed a double-top, then quickly slide downward. We continue to hold our previous view, the shared currency broke 1.1236, and it eyes for 1.1177 support line. US dollar could gain further traction from the current risk-off sentiment. If 1.1177 fails to hold, we could possibly see a big slump towards 1.1096.

Resistance: 1.1287, 1.1348, 1.1394

Support: 1.1177, 1.1096, 1.1023

Economic Data

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